Manufacturing entrepreneurs expect to invest a total of 25 per cent more in property, plant and equipment in 2018 than in 2017. In 2016, €8 billion was invested in the manufacturing industry, most of it in machinery. This reports CBS based on the new figures.
Manufacturers' expectations are even more positive in the spring survey than six months earlier. In the previous survey, at the end of 2017, manufacturing entrepreneurs still expected to invest 16 per cent more in 2018 than in 2017. They also indicated then that investment in 2017 was expected to be 19 per cent higher than in 2016. These are investments in tangible fixed assets that will come into use in the year under review, such as buildings, machinery, transport equipment and computers.
Dutch companies in the manufacturing industry invested almost 8 billion euros in 2016, 2 percent less than in 2015. In 2015 and 2014, manufacturing investments were higher than a year earlier.
Mainly machinery
In the industry, by far the most investment in 2016 was in machinery (over 68 per cent). Commercial buildings were the second investment target (15 per cent). Companies in industry invested relatively little in transport equipment (4 per cent) and least in land acquisition.
Total investments
Overall, Dutch companies invested just over 49 billion euros in 2016. This is also slightly less than in 2015, when the total exceeded 50 billion euros for the first time. In 2015 and in 2016, the share of investments by industry was one-sixth of total investments in tangible fixed assets.
Dutch companies excluding manufacturing invested the most in transport equipment (25 per cent) in 2016. They also invested heavily in machinery and buildings (23 and 22 per cent, respectively). These included both commercial and residential buildings.
Industry confidence
An ABN AMRO publication earlier showed that, despite more uncertainty, manufacturing growth remains on track. Industrial confidence is good, but growth in activity is slowing somewhat. Export growth is levelling off, especially to areas outside the eurozone. Capacity utilisation in manufacturing is back to pre-crisis levels in early 2018.
A number of other findings emerged from the report:
- Industry entrepreneurs remain optimistic about business activity. This is partly due to the still well-filled order books at many companies and continued strong demand from abroad. Economic forecasts for the next two years also lift sentiment.
- However, sentiment is levelling off slightly in a number of industries. Increased uncertainty is mainly fuelled by rising tensions in international markets.
- The labour market remains the biggest concern: this is where entrepreneurs see the most obstacles to growth. And despite sentiment about staffing levels being high in many industries, optimism here is levelling off in some sectors.
Source: CBS/ABN AMRO
